Daily US Stock Market Fundamental & Technical Analysis

Daily fundamental and technical analysis of the US stock market by full time hedge fund manager and options guru, Master Jason Ng (owner and author of Optiontradingpedia.com). Serving investors daily since March 2006.

Stock Market Analysis

Wednesday, January 31, 2018

Market Takes a Hit Exactly As Predicted...

So it starts exactly on time and exactly when I said it would...

The
US market took punishment this week as it made two consecutive negative
days this week so far. In fact, it was the most bearish two days of
2018 so far, with
the S&P500 clocking a total retreat of -1.76% or about 50 points.
In fact, it was the biggest two days retreat since August of 2017!

But is this enough?

Is
this enough of a retreat to bring the US market out of short term
overbought condition and back onto a level which encourages healthy
buying and therefore new highs?

Well,
not quite yet as it seems. I won't be surprised to see a period of
bearish / sideways inclined trading for the rest of the week for the
30MA line to catch up a bit before this market is healthy again.

The
Feds will be making their announcement this afternoon and once again,
with little more bullets on their plates, it is not expected that they
will be doing anything
today. However, at this point of time, under such economic conditions,
any rate hikes by the Fed will only be construed as a vote of confidence
in the growth
and strength of the economy and end up being a positive thing for the
market anyways. As such, this is no longer an event to be negatively
concerned about for now.

Even
though the market did take a plunge (not surprisingly since I have
largely expected it), my Ride the Flow options residual income strategy
continues to stay on track to making about 15% this month without any form of adjustments!

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